Resources Connection slips after earnings, CEO departure
Shares of Resources Connection (RECN) fell after the business consulting firm reported quarterly earnings and announced the "unanticipated" retirement of president and chief executive officer Anthony Cherbak. EARNINGS/GUIDANCE: After the market close, Resources Connection reported first quarter earnings per share of 15c on revenue of $143.4M, as compared to consensus estimates of 16c and $142.7M, respectively. Revenue in the U.S. fell 4.5% quarter-over-quarter, the company noted. Looking ahead, Resources Connection said on its Q1 conference call that it expected to report second quarter revenue of approximately $143.5M. CEO CHANGE: Resources Connection also announced the retirement of president and CEO Anthony Cherbak, effective October 7, due to "health considerations." The company said Cherbak will stay as a member of the board of directors and will become a part-time employee as a special advisor to the interim CEO during a transition period. As part of the company's formal emergency succession plan, the board named chief legal officer and executive vice president of human resources Kate Duchene to the role of interim CEO. Resources Connection noted that Duchene will be a candidate for the permanent CEO role, along with other senior leaders at the company who have been identified in its succession plan. The search could extend to external candidates, the company noted. Commenting on the matter, chairman Donald Murray said he understands that "health comes first" for Cherbak as he "must address a recent medical issue" and that the board "fully and unanimously" endorses Duchene for the interim CEO role. WHAT'S NOTABLE: Cherbak's retirement marks another major management change at the company in recent months. In mid-August, Resources Global Professionals, the operating subsidiary of Resources Connection, announced that it named Atlanta managing director Herb Mueller to the role of chief financial officer, replacing Nathan Franke upon his retirement. In addition, the company at the time promoted senior vice president of finance John Bower to the newly-created role of chief accounting officer. PRICE ACTION: In after hours trading, Resources Connection fell 3.14% to $14.50.